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HMRC internal manual

Enquiry Manual

Examining Accounts: Records Examination - Planning: Understanding the Business

You will want to know as precisely as possible what the business is about. The basic questions to ask will be similar regardless of size and type of business. The following list is far from exhaustive.

  • What products are sold or services provided?
  • What is bought and from whom?
  • What does any manufacturing process consist of?
  • Is the trade cyclical?
  • In a cash trade, is there a weekly pattern of trading?
  • What are the usual terms of trading, for both sales and purchases?
  • What types of stock are held and where are they held?
  • Are estimates provided to potential customers?
  • Are there different branches, if so what responsibility do the managers have?
  • What records are needed for administration purposes, for example appointment diary, job diary, room occupancy record for an hotel, goods in or out records, and so on?
  • Are any staff paid piece rates, or performance bonuses?
  • How are orders received from customers?
  • How remote is the proprietor or director from the receipt of cash?